Divorce Financial Analysis

Dekker Financial Services has been helping Arizona couples navigate the financial aspects of Divorce since 2006.

 

 

Divorce Financial Analysis

Divorce is overwhelming and emotional, and finances are a huge part of the divorce process.  That’s why you need a financial expert on your team . By planning before, during, and after the divorce with a Certified Divorce Financial Analyst®, an objective, thoughtful and equitable settlement can be achieved. Not only do we help find creative solutions for an equitable division of assets, we also help you understand the financial consequences of those decisions. Personalized spreadsheets and reports are provided along with a complete explanation and analysis to help you understand the financial issues surrounding divorce: cash flow vs. assets, personal vs. marital property, tax issues, house and other real estate, retirement and pensions, and spousal maintenance.

We work with divorcing individuals and couples, with  attorneys and mediators, and also on Collaborative Divorce teams.  We encourage cooperation and collaboration in the interest of finding good solutions for all parties before they go to litigation; however, we recognize that this is not always possible. If you are facing litigation, we will provide you with the solid analysis and supporting evidence you will need.

There are not always easy solutions to complex situations. We can’t cut a house in half or provide needed spousal support to care for two families. We look at what is available and where do we find the funds to establish a future for both parties. Thinking creatively is not an option, it is a necessity when it comes to finding a solution to a complex problem.


How can a CDFA help?

If you are facing divorce, chances are your life has been turned upside down and you may be feeling very uncertain about your financial future. Working with a Certified Divorce Financial Analyst® can give you the expert advice and peace of mind you need.

A Certified Divorce Financial Analyst® (CDFA) has been specially trained to analyze the financial issues in divorce and can help you understand the short and long-term impact of a financial settlement. We can provide valuable information for a fair, equitable and just resolution. 

As a CDFA® we will help you walk through a complicated process. Listed below are a few of the things we help you understand. This is not a complete list since every case is different. 

  • How property is divided: personal vs marital property
  • The value of the property
  • Optional ways of dividing the property 
  • Tax consequences of certain divisions
  • Retirement plans and pension valuations
  • Restricted stock options or other employer stock benefits calculations
  • How much spousal support and child support will be needed?
  • Potential tax implications and solutions
  • Insight into your settlement needs and the pros and cons of each decision
  • We will help you understand and avoid some of the common pitfalls in divorce.
    • Create reports and graphs showing cash flow, financial status and net worth to assist with settlement proposals and agreements. 

A Certified Divorce Financial Analyst® has been certified by the Institute of Divorce Financial Analysts® and has extensive financial expertise in the fields of financial planning, accounting or law. A CDFA® has specialized training in the financial issues of divorce and must complete 30 hours of continuing education courses every two years. 
 

Divorce Financial Planning

We don’t just look at the numbers and split it in half. There may be other options available that give you an equitable split of assets and cash flow. We look at the additional variables that others do not and help educate you on the pros and cons of each choice you may have.

Working with divorcing individuals and couples, attorneys and mediators, Dekker Financial Services focuses on divorce settlement planning, lifestyle analysis and tracings, to assist in achieving the fairest and financially equitable divorce settlement. Personalized spreadsheets and reports are provided along with a complete explanation and analysis to help you understand the financial issues surrounding divorce: cash flow vs. assets, personal vs. marital property, tax issues, house and other real estate, retirement and pensions, and spousal maintenance. We encourage cooperation and collaboration in the interest of finding good solutions for all parties before they go to litigation; however, we recognize that this is not always possible. If you are facing litigation, we will provide you with the solid analysis and supporting evidence you will need. 

There are not always easy solutions to complex situations. We can’t cut a house in half or provide a needed spousal support to care for two families. We look at what is available and where do we find the funds to establish a future for both parties. Thinking creatively is not an option, it is a necessity when it comes to finding a solution to a complex problem.

Preparing and analyzing 

Once all the documents have been reviewed, we put together a report that works two ways. One is the division of assets and liabilities and the second is cash flow. These reports are easy to understand, and the more complex back-up data is attached. By analyzing each person’s spending and responsibilities we can put together a plan that will give you the tools needed to change your spending in the future. We will lay out a fair and equitable division of the assets and then make the recommendations to you and to your attorney. 

Implementation 

Working with all parties, including the courts and your attorney to help them understand your proposal is key to the success of the process. Once the divorce is finalized, we can help you in the additional information and steps necessary to divide the assets that you have agreed on.

The financials often fog your mind for the short term, and you may need help in moving the assets, creating a budget, organizing business’s, preparing taxes etc. At Dekker Divorce Financial Services, our goal is to help walk you through this process and advice you on the best options available based on the settlement you have received. We can work with you and your attorney to help with this transition. Some items that may need to be addressed are the following: 

  • Retirement plans from an employer require a Qualified Domestic Relations Order (QDRO).
    • A QDRO needs to be completed by experts who are extensively trained in this area of expertise. We can recommend an expert in this area and coordinate with them in the preparation of these documents. 
    • Each plan requires a separate QDRO and can be costly. Some employer’s retirement plans may have provisions that, we review in the analysis process and can save you significant dollars yet achieve the same outcome. 
  • The marital home may have to be sold or one of the parties may have to refinance the mortgage. We are there to work with you on a solution to this process.
  • Opening and closing accounts investment, bank, credit card and savings accounts. 
  • Setting up new entities.
  • Transferring RSU’s. 
  • Setting up a Budget.
  • Ownership of property changes.
  • If a name is changed, how does it change things through this transition.

At Dekker Divorce Financial Consulting we can make this transition easier and give you guidance to make sure it is completed in the most tax efficient and effect way.

 

Frequently Asked Questions

Who hires you?

A Certified Divorce Financial Analyst® (CDFA®) is usually hired by a divorcing client. Sometimes an attorney hires a CDFA® as an expert witness on behalf of the client.

Do I have to meet you with my spouse?

No. We can work with both parties but separately, with couples together, or with only one spouse. If we are hired to be a neutral advisor, then all information is disclosed to both parties.

How much does it cost to work with you?

We start with a complimentary 30-minute consultation. During this first phone call or meeting we will review your situation together. After this initial review we will be able to give you an estimate that is specific to your unique needs, along with guidance on what to expect as we work together.

How do I prepare for our first meeting?

The first step in preparing for our meeting is to gather as much documentation related to your finances as possible. This would include pay stubs, bank statements, investment account statements, titles and deeds, estate plans, credit card statements, mortgage documents, car loans, etc. Here is a helpful Getting Started Checklist that will help you start to think about all the issues we will be discussing. You may also find this Priorities Worksheet useful.

Why is it important to have a CDFA® involved in our divorce? Won’t that just cost more?

In our experience, making sure financial matters are managed the best way possible right from the beginning is always less expensive than trying to go back and get something fixed or changed. A Certified Divorce Financial Analyst® is trained to help people through the maze of divorce. They sift through the financial issues including incomes, expenses, assets, tax issues, pensions, division of property, and help you reach an equitable solution that is fair to both parties. A CDFA® professional has specialized skills and experience that enables him/her to analyze financial issues in divorce in their long-term context. A CDFA® can take the offer on the table and project out 5, 10, 20 years to show you what you will have to live on if you sign the agreement.

Why can’t I just work with my CPA or existing financial planner?

Your current advisor or tax expert typically has been working with both of you. It is a conflict of interest for either professional to work with a couple who is divorcing and has been hired by both parties.  The role of the financial planner is to help people achieve their financial goals regardless of whether they are divorcing or happily married. After determining the client’s goals, the next step is to take an inventory of current assets and liabilities and then the planner looks at what needs to be done to achieve the client’s goals.

Conversely, an accountant or CPA typically looks at the details of a financial scenario as it is today and makes no future projections for each of the parties. In a divorce, they are hired to calculate the tax effect of dividing property and the effect of spousal and child support for one or two years. They typically do not project further into the future. They may also be retained to perform an audit of account activity or to perform forensic accounting functions to help find “hidden assets.”

To best meet the needs of divorcing people, you need a blend of assessing the financial situation in the present and projecting for future needs and goals; the CDFA® designation was created to fill this role. The responsibility of the CDFA® professional is to assist the client and their attorney to understand how the financial decisions they make today will impact the client’s financial future based on certain assumptions. That way, the client can make informed decisions about their financial future.

What is marital property?

Marital property or community property is property that was acquired during the marriage years. Typically gifts and inheritances are excluded unless they are “co-mingled”. A CDFA® can help you identify marital property and personal property.

I know my spouse is hiding financial assets, how do we find them?

We can assist you with tracings or financial audits to find hidden assets.

Will I get spousal support and if so, how much will I get?

Spousal support is determined by a variety of factors: incomes of both parties, the support needs, ability of one party or the other to pay, health and current lifestyle, and the state you live in, just to name a few. Working with a CDFA® will help you understand the cash flow requirements for both paying and receiving support.

How much child support will I get?

In the USA, every state has Child Support Guidelines that are mandated by the state. However, the guidelines are trickier to apply when one (or both) spouses is an independent business owner who can control their wages. In this situation, we typically look at the income potential of both parties. 

What is a QDRO and why do I need one?

A QDRO is a Qualified Domestic Relations Order. A QDRO is needed for pension plan, 401k and defined benefit plan divisions. After a divorce is finalized, this action form is required for executing the agreed division of plan assets.

My home mortgage balance is higher than the fair market value of the home? How does this work in a divorce? 

There are numerous options that we can look at. We can help you establish a business contract between all parties.

How can you help me after the divorce is final?

You may think that once you have signed the divorce paperwork you are finished with the divorce process. However, the divorce terms and divisions now have to be executed. A CDFA® can help you with transferring assets, changing titles, assisting with QDROs and other additional tasks. Then you will start to focus by looking ahead to your new financial future – we can help you with planning, budgeting and setting new goals.